Automobiles May Get Costlier, As Steel Prices Hike
Automobiles prices are likely to be hiked as the hike in the steel prices was announced by some steel major companies on Friday. Steel prices have been increased by an account of 6% to 8% according to the grade. This is due to the rising of the raw material prices of making steel such as such as iron ore, coking coal and energy prices.
Almost all steel major companied including Tata Steel, Essar Steel, JSW Steel, state-owned Steel Authority of India (SAIL), Ispat Industries and Uttam Galva on Friday have decided to increase the prices of the steel ranging from Rs 2000 to Rs 2500 per tonne.
With construction activity in full swing, the move is expected to shore up the company’s revenues. It will, however, increase the cost of construction — a move that may hurt home seekers.
A SAIL source said, the increased rates would be applicable with immediate effect. Along with other companies SAIL had also increased steel prices marginally in January, 2008. At that time, steel companies increased prices 3-5 % or by Rs 700-800 per tonne, depending on the category.
“Most of Tata Steel’s contracts are long-term and just about 12 to 15% is sold in spot market. So the hike will have a marginal impact on the company’s revenues,” an industry source said.
